Update on Santa Monica's Housing Element

The City of Santa Monica is working to update the Housing Element for the 6th Cycle, covering the planning period of 2021 through 2029. While the Housing Element was adopted by the City Council on October 21, 2021, significant changes to Housing Element Law for the 6th Cycle put the City’s plan out of compliance with the new State requirements.

Two important aspects of Housing Element Law have changed that need to be addressed:

1. A demonstration of capacity to meet the Regional Housing Needs Allocation (RHNA);
2. And the demonstration of Affirmatively Furthering Fair Housing, or AFFH, which is entirely new for the 6th Cycle.

The City is required to address these areas of concern and adopt zoning changes by October 15, 2022.

Demonstrating Capacity For this Cycle, the City must demonstrate capacity for an RHNA allocation that is significantly higher than any previous cycle. The higher numbers were set as an effort to alleviate the statewide housing crisis and years of a growing demand for affordable housing. The City’s RHNA for the 6th Cycle is a total of 8,895 total housing units, with a majority of them being set at affordable levels. To give context for how much higher this number is compared to previous years, this graph shows the average number of units permitted in the past five years relative to the future average required under the 6th Cycle RHNA. To meet this, the City would need to issue permits for an average of 1,109 units per year whereas in the previous cycle the City issued permits for an average of 209 units per year. This led to the adopted plans to upzone commercial areas across the City to demonstrate the capacity to accommodate the 8,895 housing units allocated to Santa Monica. Although this RHNA target was planned for in the adopted Housing Element, further discussion with the California Department of Housing and Community Development (HCD) has led to a potential increase in the number of units that need to be planned for. Since there is no guarantee that all future developments in the City will be housing projects, the City was told to plan for an additional “buffer”. This increase in the number of units to plan for requires that the City update its Environmental Impact Report (EIR) to study the impacts of this higher unit count. Affirmatively Furthering Fair Housing (AFFH) On top of showing capacity, the City must also demonstrate that there are incentives and programs in place to provide housing in areas of affluence and opportunity, which are typically neighborhoods that have lower densities, less diversity in housing types, greater access to amenities, and higher household incomes. Upon review of the adopted Housing Element, HCD transmitted a letter with areas of concern, most significantly AFFH. The letter also formally determined that Santa Monica is out of compliance for the 6th Cycle Housing Element Update. At the moment, City staff are actively working with HCD to address these shortfalls and to ensure that the 6th Cycle Housing Element complies with state law and meets the housing needs for all residents across the City. Consequences of Non-Compliance Because Santa Monica is currently out of compliance, State law sets a deadline of October 15, 2022, to implement the zoning changes proposed in the Housing Element (instead of the three years that would normally be afforded). To ensure cities are actively working to meet this deadline, the state has also imposed several consequences for non-compliance, such as withholding essential funds for affordable housing and the automatic streamlining for certain housing projects. The City has worked diligently to meet this deadline even though the new AFFH requirement has been a moving target with no precedence to follow from previous cycles. Additionally, guidance was not released for AFFH until April 2021, which further shortened the time to adopt a compliant Housing Element. To ensure the City adopts a compliant Housing Element that meets AFFH, fully demonstrates compliance with the RHNA target, and studies all impacts of the higher unit capacity, City Council directed the City Manager on April 26 to submit a letter to the State requesting an extension to the re-zoning deadline. For future updates on the Housing Element or for information on upcoming events and hearings, please visit the Housing Element website.